Would gig workers really be better off as employees?

In the aftermath of recent strikes by couriers for Deliveroo and UberEATS, there seems to be a growing consensus that gig workers would be better off if they were actually employed by the platforms they find work from. However, as more employers are exposed for exploiting their staff, it’s not clear that reclassifying gig workers as employees would necessarily improve their pay and conditions.

Last December, a Guardian investigation into the working practices of Sports Direct revealed that agency workers in the retailer’s warehouses were effectively paid below minimum wage. While agency workers tend to be temporary, they are still entitled to most employment rights, such as a guaranteed minimum wage, statutory sick pay and paid holidays. Sports Direct was found to be breaching these rights because agency workers were being docked 15 minutes of pay for clocking in a single minute late, irrespective of whether they had arrived at the site on time. Workers were also denied extra pay when clocking out late, even if they were finishing up a job, as well as compensation for the time that they spent completing compulsory security checks at the end of their shifts.

As of last week, similar allegations of employer misconduct were levied by BuzzFeed News against Asos, the online fashion retailer. Although BuzzFeed also alleged that Asos has been in breach of employment rights pertaining to minimum wage, their focus was on the target-driven culture at the warehouses where workers liken themselves to machines. Workers are expected to meet hourly performance targets for packing orders using scanners that enable management to track their speed as they move among the shelves. Staff reported that they weren’t able to take regular toilet or water breaks for fear of missing targets, sometimes because managers had explicitly requested that they refrain, particularly in the final working hour. There were also claims of workers being penalised for sickness or taking time off to care for loved ones.

Under the law, companies that do not pay the minimum wage can be prosecuted and employers found guilty may be subject to prison sentences in addition to fines. Since 2014, only three of 700 employers in breach of the law have been prosecuted. Overall, these companies underpaid more than 13,000 workers by over £3.5m. Supposedly, the high costs of prosecution and delays that prosecutions can cause in securing back pay for affected workers are deterrents to bringing criminal cases. Yet, during this period of low enforcement the National Audit Office has found that the number of workers owed arrears has more than doubled from 2014-15 to 2015-16, rising from 26,000 to 58,000. Perhaps most unsettling of all is that while there is a failure to use the mechanisms in place to ensure that the minimum wage is paid, there simply are no mechanisms for addressing issues arising from a target culture, such as stress and anxiety.

Arguably, gig workers have more freedom and flexibility than the employees in the warehouses of Sports Direct and Asos. This does not necessarily mean that they have full autonomy over their schedules, but they do have more agency; for example, Deliveroo couriers must work at least two shifts across Friday, Saturday or Sunday, but they choose when those weekend shifts are according to their own availability. Whether these platforms are exercising control over workers to the degree that traditional employers would is a matter currently being debated in court. It’s not a cut and dry binary, however; the trade union GMB has filed a class action against Uber on behalf of 100 drivers, but are making the case that they fall under a third category: workers under a directive. The ambition here is to retain the freedom and flexibility that is increasingly valued by workers while also ensuring that they’re protected.

At the RSA, we’re currently undertaking research to find out how many people in the UK are now gigging for online platforms in the sharing economy, learn more about their experiences of work, and make sense of their relationships to platforms as workers. Our Chief Executive Matthew Taylor was just appointed as Chair of an independent review into ‘non-standard work arrangements’, or essentially a review into modern forms of work, including the changing nature of self-employment and the use of zero-hour contracts. While the review will cover far more forms of work than gigging, it speaks to the growing significance of gigging in our economy. The RSA’s research will unpack the complexity of gig work, and will hopefully help resolve the million-pound questions of whether or not workers are self-employed and how they can be best supported by government, platforms and civil society. This will go beyond making recommendations about pay, exploring how to tackle issues of insecurity while also advocating for greater agency and autonomy in work.

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I am glad the gig economy is in the daylight and rogue employers are exposed. As consumers we can decide which businesses to support. As the recent RSA report notes employers the exploit workers cost society as a whole.

I wonder if any MPs still 'employ' assistants without pay or on minimum wage.

Many millennial are approaching their 30s, with student debt, no pension plan, no hope of a mortgage , low pay as a way of life and limited employment protection and rights. In 40 years unless things change, they will have inadequate private pension and therefore rely on means tested benefits, no home to sell to pay for third social care and the state will increasingly pick up the bill for their private rented accommodation. Added to this the proportion of retirees to working age people , and therefore tax payers to pick up the bill, will be greater than it is today.

Many years ago a job from a temp agency paid a lot more than the same work on a permanent contract. The risk and flexibility was recognised by both sides. A plumber in my area can name his price, if you can find one. Not all gig work is the same, now at least it is being teased apart .

The idea that 'gig' workers (define please) have more say over their work is laughable. The examples you offer are achievable and probably more likely as unionised employees. Not only that such employees are statistically safer and there is less discrimination. Companies avoid sick pay, pensions and NI when taking on short term contractors (not the case for zero hours I assume). So who picks up tab? The taxpayer - and who avoids paying tax - the same companies typically. If this is the starting point it definitely isn't an independent review.

The idea that 'gig' workers (define please) have more say over their work is laughable. The examples you offer are achievable and probably more likely as unionised employees. Not only that such employees are statistically safer and there is less discrimination. Companies avoid sick pay, pensions and NI when taking on short term contractors (not the case for zero hours I assume). So who picks up tab? The taxpayer - and who avoids paying tax - the same companies typically. If this is the starting point it definitely isn't an independent review.

Thanks for your comment, Edward. Yes, this research will tie in nicely with other strands of work the RSA is doing, including inclusive growth as you mentioned, as well as our ongoing work on self-employment and UBI.

Edward Harkins

3rd October 2016

Interesting perspective. It goes directly to the core matters of work and 'jobs'. We have in recent times what seemed at times to be becoming a fad for 'self-employment' as the savior of the UK economy in the brave new world of work. The ever-present reality of There is a need for more research on to what extent the 'self' employed have actually become members of the global precariat. In other words, they have gotten themselves into the position of the worse of both worlds - the sole responsibilities, uncertainties and insecurity of freelancing, along with vulnerability to exploitation by predatory and exploitative employer/commissioners.

The outcome of the RSA's research will be doubtless helpful and perhaps revealing. It will also tie in well with the RSA's current work on the inclusive growth theme. All-in-all look,s like an important body of work building.